Things to Know Before you Sign a Music Contract!

As Nigeria’s (Naija) entertainment industry grows, we see it becoming sophisticated and talents and entertainment companies looking to the court system to resolve disputes. While Nigeria might not have a great criminal justice or civil law system, when it comes to commercial/contract disputes (a subset of Nigeria’s civil law system), we find that Nigeria’s legal system manages to work relatively okay.Today’s topic deals with understanding and dissecting music contracts. In this article, I set the foundation for what is to come with a focus on the basic principles of a legal contract you should know if you are an artist signing a record label contract or a label drafting a contract to be signed.

Follow up articles where I break down the common legal terms seen in various types of music contracts (music manager contracts, record label contracts, record producer contracts, performance contracts etc.) should be forthcoming.

The Big Picture Contract Principles

What is a Contract? In simple terms,a contract is where two or more people enter into an agreement to do or not do particular things.

What are the essential elements of a contract?

There must be a “meeting of the minds”-The parties to the contract have a mutual understanding of what the contract covers. For example, Artist Skilez thinks she is signing a contract to rap at NEXTDAY LOVE SOIREE but RAT CITY Records, the label asking for her services, is expecting her to sing. Well, Skilez does not sing. There is no meeting of the minds and the contract will likely be ruled unenforceable.

There must be an Offer- RAT City Records must make a genuine proposal (offer) to pay Skilez to sing at NEXTDay LOVE SOIREE.

Offer term(s) must be spelt out- RAT City communicates this to Skilez AND is clear and definitive as to: 1) price; 2) performance (R &B performance for 30mins at NEXTDay Love Soiree); 3) length (Skilez is to perform for one day only); and 4) expiration (RAT City gives Skilez an opportunity to respond to its offer in 2weeks. If the offer is silent on the response date, the court determines the date based on what a “reasonable time” would be).

There must be an acceptance – Skilez has to agree to the exact terms proposed by RAT City by accepting RAT’s offer in writing or orally. NOTE: If Skilez changes any term, then it is a counteroffer not an acceptance.

There must be a bargain for exchange aka “consideration”– this means money, services, goods. For example, in exchange for Skilez’s performance, RAT City Records will pay her $10,000.

All parties must be competent- If Skilez is smoking a joint at the time she enters a contract with RAT City, she would be considered incompetent. Similarly, if Skilez was mentally disabled or say 12years old, that would make him incompetent by most contract laws. In Yankee, children can enter contracts but they can void the contract they enter into if they are not 18 years of age.

There is Consent– Each party to the contract mustagree to all terms of the contract.

There is Legal Activity- Sorry you can’t enter into a contract to sell pirated CDs or sing other artists copyrighted songs and expect it to be enforceable in court. You might make lots of money from it, especially if the original owners do not enforce it BUT if there is wahala (problem) and you run to court to complain, expect the court to say, “er, you stole another person’s song and you are coming to complain? Abeg fashi jare!” Okay maybe not exactly those words but you get my drift.

The above is the big picture view of a contract. But, let’s get even more specific. How do you negotiate a contract and what are things to look for if you are signing or drafting one?

Negotiating/Drafting a Contract- Basic Principles

When negotiating a contract always look for or have these things present in your contract:

Parties – Who is involved? For example, RAT City Records, Ltd. & Yewande Mason aka Skilez. Notice the Limited “Ltd.” an incorporated entity. If an incorporated entity is involved in your contract, SPELL IT OUT! Also notice the full name of the artist. The legal name of the artist is what should be in the contract. The “aka” part just helps specify even further who the person is. DO NOT put only nicknames in a contract and expect that it would be binding. Spell out the parties, their legal names, nicknames for “jara” and their full titles.

Location– Get even more specific with address and location of the businesses involved and individuals so there is no confusion on which party we speak of and where they are based. For example, if there are many RAT City Records across Nigeria, then a contract that says RAT City without the exact location of RAT City can create problems down the line.

Consent– If Skilez agrees to sing a song called “Shayo” in exchange for $10,000, then all parties in Skilez’s written contract (Skilez & RAT CITY) must agree i.e. consent that Skilez will sing the “Shayo” song as stated above.

Written – If Skilez gets into a business deal with RAT City Records, it is critical she puts her agreement into a written contract. While the oral promises of both Skilez and RAT City can be enforced in court, it can be very hard to enforce oral contracts because of the “he said,” “she said” factor. Skilez and of course you reading this article should always get everything in writing.

Signature– If there is no signature on the dotted line, it would be hard to enforce the contract or hold any party in it accountable. So, get your signature!

Deal with the boss– Who is in charge? Na who be the boss lady or man? Who has the authority to make a legally binding contract with you? If you are a label, it is not the manager of the artist unless some “power of attorney” has been signed by the artist. The artist signs the dotted line. Conversely for artists, the boss i.e. CEO, COO, CFO, Owner, Founder signs the agreement. If it is anyone but the above, make sure the person who signs the agreement with you has THE AUTHORITY to do so.

KISS– Keep it simple silly. Lawyers in general can be quite flamboyant with their words. Thankfully, you don’t have to be. Get straight to the point. Be clear on what you want and what you are getting. Simple English, biko (please).

Payment- Who gets paid what? How much? When? Sort the details out in your contract.

Services– As an artist what is expected of you? Are you expected to sing, create an album, perform at concerts ? In our example, what does RAT City have to do for Skilez in exchange for her services? Is the label expected to do Skilez’s promotion, help her with shooting a video etc. All of these service terms must be spelt out in the contract.

Resolving disputes- “Sey na like dis we go dey dey?” How we go take solve our wahala? We no be broda and sista. Even brodas and sistas dey fight, how much more non-relatives? So, spell this one out BIG TIME. THIS IS A MUST! Deal with this NOW! Too often, it is ignored and when the dispute happens, stuff hits the fan and it is an ugly sight. Most contracts in the West have what is called a “mediation” or “arbitration” clause. Nigeria’s legal system realizing that it takes forever to resolve a matter, has now instituted an Alternative Dispute Resolution system aka ADR (arbitration, mediation) much like the West to help expedite cases. An ADR clause is great in contracts as it essentially makes you all sit and discuss your wahala with each other. So, put the mediation and arbitration clauses in your contracts. Mediation is more like, “make we talk the wahala over.” Arbitration is more like a mini-trial in a very informal setting that still gives you the “make we talk the wahala” feel, although an arbitrator comes down with a final decision.

Sort out the details on what happens if there is a falling out and have it spelt out in the contract. In Naija’s music industry, as in any other industry around the globe, we are seeing even more contract disputes as the industry continues to grow. Many artists are having a fall out with their record labels and vice versa.

Which law governs? Naija artists in Yankee and Jand, specify which state law governs. If we fight and we are in Yankee, do we use the laws of New York to resolve our fight? If you are in Naija, do we use Lagos State laws? If you are in Naija and a promotions company in the USA is working with you to bring you to perform in Yankee, which law works, USA or Naija? Spell it out.

Confidentiality- It is seriously nobody’s business what happened between you and your label or vice versa. It really isn’t and you should keep it that way. The music industry is a small community and if you have a bad attitude and act immature when things don’t work out, you not only make people not want to do business with you, people also know you will take their business everywhere if there is a problem. To that effect, artists and labels protect yourself and insist on a confidential clause: 1) to protect all you have agreed to and; 2) to avoid the “amebo” i.e. “gbeborun.” If any party breaches the contract i.e. “gbeborun” and it hurts your bottom line i.e. your money, then it is easily enforceable in court.

Termination- Termination clause is an important aspect of any contract. How do we end this relationship? If either party does not fulfill their obligation (breach), then we probably want to end it. Other instances might be where, God forbid, someone dies or is really sick and can’t perform. Spell it out.

The above are principles that should guide you when you are reading any contract and of course a music contract. We get into the specifics kinds of contract soon. In the meantime, here is a respected website, Martindale, to search for Nigerian lawyers and law firms that might handle contract disputes.

Photocredit: Gunner Grobel/Creative Commons License

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AFRICA MUSIC LAW™ (AML) is a pioneering music business and entertainment law blog and podcast show by Fashion and Entertainment Lawyer Ms. Uduak Oduok empowering the African artist and Africa’s rapidly evolving entertainment industry through brilliant music business and entertainment law commentary and analysis, industry news, and exclusive interviews.

Credited for several firsts in the fashion and entertainment industry, Ms. Uduak is also a Partner and Co-Founder of Ebitu Law Group, P.C. where she handles her law firm’s intellectual property law, media, business, fashion, and entertainment law practice areas. She has litigated a wide variety of cases in California courts and handled a variety of entertainment deals for clients in the USA, Africa, and Asia. Her work and contributions to the creative industry have been recognized by numerous organizations including the National Bar Association, The American University School of Law and featured in prestigious legal publications in the USA including ABA Journal and The California Lawyer Magazine.